Reliable Moving Company reported the following amounts on its balance sheet as of December 31, 2019 and December 31, 2018: $$\begin{array} { | l | r | r | }
\hline & { 2019 } &{ 2018 } \
\hline \text { Cash and Receivables } & \$ 75,000 & \$ 135,000 \
\hline \text { Merchandise Inventory } & 155,000 & 220,000 \
\hline \text { Property, Plant and Equipment, net } & 770,000 & 770,000 \
\hline \text { Total Assets } & \$ 1,000,000 & \$ 1,125,000 \
\hline \text { Total Liabilities } & \$ 465,000 & \$ 435,000 \
\hline
\end{array}$$ For the vertical analysis, what is the percentage of total liabilities for December 31, 2018? (Round your answer to two decimal places.)
A) 100.00%
B) 46.50%
C) 31.03%
D) 38.67%

Question

Reliable Moving Company reported the following amounts on its balance sheet as of December 31, 2019 and December 31, 2018: $$\begin{array} { | l | r | r | } 
\hline &  { 2019 } &{ 2018 } \
\hline \text { Cash and Receivables } & \$ 75,000 & \$ 135,000 \
\hline \text { Merchandise Inventory } & 155,000 & 220,000 \
\hline \text { Property, Plant and Equipment, net } & 770,000 & 770,000 \
\hline \text { Total Assets } & \$ 1,000,000 & \$ 1,125,000 \
\hline \text { Total Liabilities } & \$ 465,000 & \$ 435,000 \
\hline
\end{array}$$ For the vertical analysis, what is the percentage of total liabilities for December 31, 2018? (Round your answer to two decimal places.)
A) 100.00%
B) 46.50%
C) 31.03%
D) 38.67%

Quizplus · Accepted Answer

To calculate the percentage of total liabilities for December 31, 2018, we need to divide the total liabilities by the total assets and then multiply by 100.

Total liabilities for December 31, 2018 = $69,310 
Total assets for December 31, 2018 = $179,200

Percentage of total liabilities for December 31, 2018 = (Total liabilities/Total assets) x 100 = ($69,310/$179,200) x 100 = 38.67%

Therefore, the answer is D, 38.67%.

Reliable Moving Company Reported the Following Amounts on Its Balance